MOKULELE FLIGHT SERVICES DBA MOKULELE AIRLINES, INC.

PROPOSAL TO PROVIDE ESSENTIAL AIR SERVICES 

Kalaupapa, Hawaii 

Dated: October 30th, 2013

Order 2013-10-3 

Served: October 4, 2013 

Docket: DOT-OST-2000-6773 
Mokulele Airlines Proposal to Provide Essential Air Service to Kamuela Airport

Mokulele Flight Services, Inc. ,dba Mokulele Airlines, submits the enclosed proposal to provide essential 

air services to the community of Kalaupapa, located on the island of Molokai, Hawaii. Such service is 

provided under Essential Air Service Order 2013-10-3, dated October 4, 2013. 

Mokulele Airlines is a 135 FAA certified scheduled airline with authorization to carry both passengers 

and mail. Operating under this certificate, Mokulele Airlines, provides scheduled passenger services 

throughout the islands of Hawaii. Founded seven years ago, Mokulele Airlines is an integral part of the 

Hawaiian Island culture. 

Mokulele fulfills the four selection criteria for essential air service award: (1) service reliability; (2) 

contractual and marketing arrangements with a larger carrier at the hub; (3) interline arrangements with 

a larger carrier at the hub; and (4) community views. 

Proposal: 

In response to the Request for Proposal issued by the Department of Transportation, Mokulele Airlines 

is proposing several potential options for service to the community of Kalaupapa. We are prepared to 

implement all or selected options. Option One - daily departures between Kalaupapa and Honolulu, 

Option Two – daily departures between Kalaupapa and Kahului, Option Three - d 

Mokulele’s goai is providing cost effective flights for the residents of Kalaupapa with competitive fares 

on non-stop flights to Honolulu and Kahului. The timing and price of these flights afford the residents 

access to easy same day travel to and from Kalaupapa. Every effort is made to insure that the flight 

schedule affords the traveler connectivity to international and mainland departures in Honolulu and 

Kahului. 

Mokulele is poised to begin this service within 60 days of acceptance of the proposal. Many of the 

residents of Kalaupapa are familiar with the excellent service provided by Mokulele Airlines to and from 

Hoolehua, Molokai and other destinations throughout the islands. Mokulele Airlines is in a position to 

offer passengers onward flights through global distribution networks assuring online access by 

traditional travel agents and online travel agencies such as Expedia and Orbitz. 

Experience: 

Earlier in the year, Mokulele Airlines was awarded it’s first bid to provide Essential Air Service to 

Kamuela, Hawaii. With service beginning in September, 2013, this route has become very popular with 

Kamuela residents. Operating twelve weekly flights to and from Kamuela, Mokulele Airlines provides 
comfortable, reliable air transport between Kamuela and Kahului. We are confident in our ability to 

provide excellent service to Kalaupapa Airport. 

We feel that our excellent marketing programs, responsible management, customer service, new and 

well maintained aircraft, and our demonstrated operational excellence will build traffic in the Kalaupapa 

market. We are prepared to partner with the community to make this a viable market. 

We have experience in returning under- serviced, neglected communities back to life. Through a 

marketing arrangement with Traavasa/Hana Hotels, we entered the Hana/Kahului market in 2012. We 

offered a competitive fare pricing structure that was not available from the previous operator. 

In operation for eight months, the Kahalui/Hana route is a real success story. In the first eight months of 

operation, Mokulele flew 1,706 passengers compared to the previous operator who flew less that four 

hundred passengers in the first ten months of 2012. 

Mokulele Airlines will repeat this success story with Kamuela/Waimea/Kohala Coast communities. 

Equipment: 

The proposed flights are offered aboard a Cessna Grand Caravan operated with both a pilot and a first 

officer onboard. The Cessna Caravan is a modern aircraft, still in production. Manufactured by one of 

the most recognized aviation companies in history, the Caravan is one of the largest and safest aircraft 

of its size and range. The aircraft comfortably seats nine passengers with a large cargo pod for baggage. 

The aircraft is equipped with modern avionics, fully integrated auto pilot, weather radar, and onboard 

weather. The aircraft are air conditioned and heated for passenger comfort. 

Mokulele Airlines continues to expand and improve its fleet of caravans, adding additional aircraft as the 

traffic warrants and replacing older aircraft with new ones. The fleet currently consists of 11 aircraft of 

which five were purchased in the last year.

Reservations and connectivity: 

Flight reservations are made easy on Mokulele Airlines. Reservations can be made via our website at 

www.mokulelehawaii.com. Customers can also make reservations by telephone with our experienced, 

industry knowledgeable staff located in Hawaii. Mokulele Airlines offers global distribution integration, 

thus accommodating easy access to inventory by traditional travel agents and online travel agencies 

such as Orbitz or Travelocity. 

Mokulele Airlines is the only commuter airline in Hawaii with a code share partner operating interisland. 

This same affiliation carries the potential for bilateral interline ticketing with many major carriers. 

Mokulele has operated as a codeshare partner with Mesa Airline, Go! Since 2007. Mokulele also has 

interline agreements with Alaska Airlines and two international carriers. Under the Mesa Airlines code, 

Mokulele can also offer interline ticketing to Mesa partners – American, Delta, and USAIR. 
Service: 

Like all of our ticket counters, the facility in Kalaupapa will be staffed by professional, well trained 

personnel who will assist in both reservations and the boarding process. The counter will be 

professionally marked with clearly readable signs identifying it as the Mokulele Airlines ticket counter. 

Personnel will assist boarding passengers in a professional and helpful manner. 

Passengers are required to check in 30 minutes prior to departure in Kalaupapa. Check in times in for 

the Honolulu return fight may be longer due to TSA requirements. 

Flights to and from Honolulu are operated out of the interisland terminal. Shuttle bus service operates 

continuously assuring easy transportation to the international terminal. 

Conclusion: 

Mokulele’s record for on time performance and reliability coupled with their dedication to the 

communities that they serve, makes Mokulele an ideal candidate to provide essential air service to the 

Kalaupapa Airport. Daily service between Kalauapapand Honolulu provides this community the ability to 

connect with mainland as well as interisland flights. 

Our bid assures that the proposed route is serviced reliably and cost effectively. The proposed schedule 

coincides with many daily departures to the mainland and other islands. 

We appreciate the opportunity to respond to your request for proposal. 

Respectfully submitted by: 

Ron Hansen 

CEO/President 

Mokulele Flight Services dba Mokulele Airlines, Inc. 

73-350 U’u Street 

Kailua-Kona, Hi. 96740 
OVERVIEW 

Based in Kona, Hawaii, Mokulele was founded in 1998 as an inter-island airline offering service to seven 

destinations on five islands. The management team of Mokulele is highly experienced in the airline 

industry and has seized on the opportunity for expansion by providing greater efficiencies and 

operational controls. Mokulele is a “scheduled” Part 135 Air Carrier with an excellent service record. 

Mokulele operates more than 120 daily flights and carries 20,000 plus passengers monthly with its fleet 

of ten Cessna Grand Caravans. 

Current Operations 

Mokulele currently employs 87 full-time and 30 part-time employees, most performing collateral duties 

at the seven airports it currently serves. The employee group is non-union, primarily comprised of 

young, local residents eager to see the company prosper and grow in the island market. In December 

2012, Mokulele relocated its call center from the mainland to Maui to provide Mokulele’s passengers 

with an enhanced level of customer service by ensuring that their calls will be answered by local 

residents who are knowledgeable about Hawaii. 

Presently, Mokulele owns and operates ten new and late model Cessna Grand Caravans, each 

configured with nine passenger seats The aircraft maintenance departments are located at Kona and 

Kahului where it employs 12 licensed A&P mechanics on a 20 hour, seven day per week schedule. All 

maintenance except engine and prop overhaul is accomplished by Mokulele’s maintenance department. 

Operating Certificate and Authority

Mokulele conducts business as a certified FAA Part 135, Scheduled Air Carrier. Refer to Exhibit A for 

copies of Mokulele’s FAA Air Carrier Certificate No. MK9A559L and DOT Certificate of Public 

Convenience and Necessity for Interstate Air Transportation. 

Routes and Airports Served 

Mokulele operates as a passenger carrier and code shares with Go Airlines with the intention of 

expanding the inter-line agreements with foreign and domestic airlines which serve Hawaii. 

The attached route map attests to Mokulele’ coverage of the island.

Company Overview 
Market Opportunity

The following, in descending order of importance, are ten elements that will lead to the continued 

success of Mokulele Airlines: 

 Employing an experienced, professional management team that combines vision, realism and 

solid knowledge of the Federal Aviation Regulations relating to flight and legal responsibilities 

involved for companies engaged in scheduled passenger flights. The management team’s 

strengths include familiarity with the latest aviation, electronic and informational technologies; 

familiarity with the region and markets to be served; realization of the crucial importance of an 

organization’s personnel and their relationship to the company’s success and a total 

commitment to the overall mission and goals of the airline. 

 Implementing an intelligent, progressive and aggressive marketing strategy that identifies 

Mokulele Airlines as a unique air carrier flying unique routes with a unique passenger clientele. 

It is a marketing philosophy that identifies Mokulele and its employees as sharper, smarter and 

with a higher level of professionalism and operation standard than is the norm in the market, 

combined with highly competitive fare pricing. 

 Presenting a friendly, cooperative, enjoyable yet highly professional safety-conscious flight 

crew to the traveling public. 

 Maintaining aircraft with a highly trained and knowledgeable staff equipped with spare parts 

and tooling, yields aircraft that comply with all FAA aircraft maintenance standards and high 

dispatch reliability. 

 

 Establishing a high level of operational oversight and quality control that will ensure that 

Mokulele always lives up to its commitment to a high level of flight safety, customer satisfaction 

and convenience at a reasonable, highly competitive fare. 

 Growing the company based on need rather than growth for growth’s sake. This requires being 

aware of solid niche-enlargement opportunities that will allow incremental, but always 

profitable expansion. Examples of this strategy include the expansion of service to Kapalua and 

Hana, Maui in 2012. 

 Development and implementation of code share and interline agreements with well 

established major airlines thus offering cost advantages to our clients. 

 Identifying and developing cost-effective opportunities for new markets, new market concepts 

and expanded sales potential. This objective can be accomplished by maintaining an awareness 

of combining the core aviation business with ancillary marketing concepts and activities and 

ground-based operations that support, supplement, and complement the aviation elements of 

the business. These elements include such activities as aviation services, and other logical 

business pursuits both within and outside the immediate aviation business. 

 Utilization of the latest electronic and informational technologies in sales and marketing, 

reservations, scheduling, resource planning and operational oversight. Technologies such as 

Internet marketing, reservations, operational oversight and flight tracking all contribute to 

reduced staffing requirements for Mokulele. 
Competitive Advantages 

 The current competitive environment for Mokulele Airlines is bright with very little competition. 

Mokulele Airlines is uniquely positioned to continue growing. Mokulele has the most daily 

flights from the following airports: Kona (KOA) 12, Kahului Airport (OGG) 21, Kapalua (JHM) 7, 

Hana (HNM) 2, Ho’olehua Airport (MKK) 14. 

Sales and Marketing 

Mokulele’s growth strategy concentrates on building market share through the following actions: 

 Code Sharing and Interline Agreements — Code sharing offers the passengers that begin their flight 

on Mokulele a reduced fare when they transfer to a code-sharing partner of Mokulele’s to continue 

their flight to the final destination. 
 

“Our entire trip over to Molokai to ride the mules down to Kalaupapa, beginning with a flawless 

flight, was so amazing and challenging for me. Not one to love heights, nothing during the flight 

caused me concern or angst. Your pilots did a great job!” - Cheryl B. 

“I want to thank you Lehua Wanda for helping me with my United flight issues. She is so 

wonderful and helpful. I wouldn't be able to get to Maui without her help for over an hour. Big 

Hugs to her. Thank you Manit 

“On 7 February I flew from Molokai to Maui for a day trip. I flew my favorite airline, of course. 

Great service by the staff at the counter and the pilots were outstanding. There is one more 

reason to like Mokulele...you take great care of our military personnel. Thanks for a great flight. 

I will be flying with you again in another 10 days.” - Paul S. 

“What do I enjoy about flying for Mokulele?” “The people, the company, the planes, all the 

views... It’s all great.” - Jordan B., pilot 

“As a former Navy P-3 Orion dude I just wanted to say what an amazing flight my family 

(especially very nervous-to-fly wife) had with Chris flying us from Maui to Kona on Sunday 26 

August. He is a tremendous "stick" and really greased the landing, and his positive attitude and 

aloha spirit made the flight extremely memorable. I will absolutely be flying Mokulele again on 

my next tripto Hawaii! Many thanks and please pass my gratitude and comments on to Chris 

and everyone in a leadership position with your great company!” – Commander Dave 

“I need help to locate one of your employees named Jeremy. Back in March I lost my backpack 

off the cliffs of Honolua Bay. To my surprise it was mailed back to my home in New York by 

Jeremy. He left a note with his business card but unfortunately I have lost this information. I 

want to contact him and thank him for his thoughtfulness. All I need is an email.” - Angela 

“My name is Mark H. and I feel a bit delinquent at submitting this. It was toward the end of 

September I flew out of Waimea Airport into Kahalui, Maui. This is regarding especially Rona 

Lee, Station Manager and Edwyna, Customer Service Agent.I went into the terminal before the 

early morning flight,although I was flying on the afternoon flight,burdened with a baggage 

concern wanting to see if one of my bags could go out on the early flight in case there was no 

room for it later. I am disabled and have a special chair that requires two bags for reassembly, 

What Our Customers 

Say About Us 
in addition to my carry on and back pack.Before they even knew I had an issue, they welcomed 

me with such warm aloha,immediately, the stress I was feeling diminished significantly. 

Then when they heard of my request, even though they admitted they were unable to fulfill my 

request per se, they assured me they would help me. I was then feeling the full force of aloha 

spirit and totally relaxed. Aunty Patsy, the Kona Station Manager happened to be there at the 

time and they spoke with her. In the end, all I was asked to do was show up a little early and 

they would take care of it. On top of it, they informed me handicapped equipment was no 

charge even though I was prepared to pay full price! Wow! I left blown away with Aloha Feeling 

all through me. On top of all that, a whole 10 days later when I returned on the evening flight, 

one of the two mentioned at the top, the shorter of the two (Edwyna?...maybe Rona Lee...but 

the shorter, smaller one)recognized me and even remembered my name!!! and asked me how 

my trip went!!! Wow! More Aloha! Out to my car with a smile soooooo big! Never had an 

experience like that with any airline before. 

I had to give these two women magnified praise for their very special Customer Care aloha 

spirit, far above and beyond the norm, and the "call of duty". Totally COOL! 

I am flying the same trip this weekend and again next weekend fully looking forward to 

supporting your airlines!!!!!!!!!!!!! “Blessings and Mahalo,Mark H Extremely Satisfied Customer 
GDS Connectivity 

Mokulele Airlines provides full global distribution connectivity. Mokulele flights are listed on Apollo, 

Worldspan, Galileo,Travelport and Sabre. 

Mokulele Airlines flights are available for booking by most travel agents and through popular online 

booking sites such as Expedia and Orbitz. 

Passengers can book directly with Mokulele Airlines through our website at www.mokulelehawaii.com. 

We also provide a call center for telephone bookings . . 

CODESHARE AND INTERLINE 

Currently, Mokulele Airlines codeshares flights with GO Airlines. Through this connection, passengers 

can book onward flights with a number of interline carriers. 

RESERVATION 

Mokulele Airlines utilizes a sophisticated airline specific reservations system to initiate, track and report 

on reservations made through their website. 

Your Connection to the 

World from Hawaii 
Mokulele Airlines operates eight nine passenger Cessna Grand Caravan aircraft. The Grand Caravan 

aircraft is currently in production. Five of the ten aircraft are new, off the production line. 

The Cessna Grand Caravan enjoys a reputation for dependability and safety. The aircraft is in worldwide 

use, accumulating more than 12 million hours throughout the worldwide fleet of aircraft. 

The aircraft is air conditioned and heated assuring passenger comfort. The nine passenger Cessna 

includes a large cargo pod assuring comfort in the passenger cabin. 

The Cessna Grand Caravans are equipped with: 

 Garmin G-100 avionics package 

 GPS Traffic and terrain avoidance systems 

 Onboard weather and weather radar 

 Integrated auto pilot 

Our Equipment 
Proposed Schedule for Kalaupapa, Molokai 

This is only a possible schedule – Mokulele plans on working with the tour operators, Park Service, and community on developing a 

schedule that works for the community to maximize their air service. We feel that providing service to both Honolulu and Kahului 

will alleviate the needs to fly “topside” to Ho’olehua, Moloka’I – however we have included 6 flights a week to “topside” should the 

community and DOT want this to be part of the bid package. 

Kalaupapa to Honolulu, Oahu Honolulu to Kalaupapa

Depart Arrive Frequency

8:55AM 9:25AM X Sun

2:45PM 3:15PM Daily

Depart Arrive Frequency

8:30AM 9:00AM X Sun

4:00PM 4:30PM Daily

Kalaupapa to Kahului, Maui Kahului to Kalaupapa

Depart Arrive Frequency

9:20AM 9:44AM X Sun

4:55PM 5:17PM Daily

Depart Arrive Frequency

8:08AM 8:30AM X Sun

2:00PM 2:22PM Daily

Proposed Fares for Kalaupapa, Molokai 

Below fares are just sample proposed based on today’s current environment and are subject to change. Fares below are ONE WAY 

and may not include all taxes (IE – TSA security fee). 

Honolulu Kahului Ho’olehua

Walk up, last seat fare $99 $99 $39

Everyday low fare $79 $79

Lowest fare, advance 

purchase $59 $59

Mokulele believes in charging ALL residents of Molokai affordable yet realistic fares. The subsidy from the U.S. DOT should not help 

support “other” operations within our airline, we are only charging fair prices that are sustainable. We will also include Kalaupapa 

with any and all fare sales that are network-wide. 
Kalaupapa to Kalaupapa to Kalaupapa to Kalaupapa to Kalaupapa to Kalaupapa to Kalaupapa to Kalaupapa to

Honolulu Kahului Honolulu Kahului Honolulu Kahului Honolulu Kahului

Year 1 Year 1 Year 2 Year 2 Year 3 Year 3 Year 4 Year 4

Weekly Frequencies 26 26 26 26 26 26 26 26Completion Factor 99% 99% 99% 99% 99% 99% 99% 99%Annual Departures 1326 1326 1326 1326 1326 1326 1326 1326Block Time (in minutes) 0.60 0.40 0.60 0.40 0.60 0.40 0.60 0.40Annual Block Hours 796 530 796 530 796 530 796 530Stage length (statute miles) 62 41 62 41 62 41 62 41Available Seat Miles (9 seats) 739908 489294 739908 489294 739908 489294 739908 489294Load Factor 35% 23% 38% 27% 41% 32% 44% 34%Passengers 4200 2700 4500 3200 4900 3800 5200 4100Revenue Passenger Miles 260400 110700 279000 131200 303800 155800 322400 168100Average Fare $71.16 $73.49 $71.16 $73.49 $73.95 $73.49 $75.81 $77.21

$79 fare $79 fare $79 fare $79 fare $82 fare $79 fare $84 fare $83 fare

Revenue:

Passenger $298,883.72 $198,418.60 $320,232.56 $235,162.79 $362,372.09 $279,255.81 $394,232.56 $316,558.14

Ancillaries $3.50 $14,700.00 $9,450.00 $15,750.00 $9,450.00 $17,150.00 $9,450.00 $18,200.00 $9,450.00

$313,583.72 $207,868.60 $335,982.56 $244,612.79 $379,522.09 $288,705.81 $412,432.56 $326,008.14

Assumptions

Fuel Cost P/Gal $3.80

Fuel Burn Gallons P/Hr 55.00

Direct Expenses:

Ownership $65.00 Per Blk Hr $51,714.00 $34,476.00 $51,714.00 $34,476.00 $51,714.00 $34,476.00 $51,714.00 $34,476.00

Flight Crew $75.00 Per Blk Hr $59,670.00 $39,780.00 $62,653.50 $41,769.00 $68,918.85 $45,945.90 $72,364.79 $48,243.20

Fuel & Into Plane Fees $209.00 Per Blk Hr $166,280.40 $110,853.60 $191,222.46 $127,481.64 $210,344.71 $140,229.80 $231,379.18 $154,252.78

Insurance $15.00 Per Blk Hr $11,934.00 $7,956.00 $11,934.00 $7,956.00 $13,127.40 $8,751.60 $13,783.77 $9,189.18

Maintenance $210.00 Per Blk Hr $167,076.00 $111,384.00 $175,429.80 $116,953.20 $192,972.78 $128,648.52 $202,621.42 $135,080.95

Miscellaneous/Reaccom $15.00 Per Blk Hr $11,934.00 $7,956.00 $11,934.00 $7,956.00 $13,127.40 $8,751.60 $13,783.77 $9,189.18

Total Direct Expenses $468,608.40 $312,405.60 $504,887.76 $336,591.84 $550,205.14 $366,803.42 $585,646.93 $390,431.29Indirect Expenses:

Landing Fees $18.00 per dept $23,868.00 $23,868.00 $23,868.00 $23,868.00 $26,254.80 $26,254.80 $26,254.80 $26,254.80

Passenger Services $96,627.50 $89,340.00 $101,458.88 $93,807.00 $111,604.76 $103,187.70 $122,765.24 $113,506.47

Marketing $3.35 per Pax $14,070.00 $9,045.00 $15,075.00 $10,720.00 $16,582.50 $11,792.00 $16,582.50 $11,792.00

Set up costs / training $10,000.00 $10,000.00

General & Admin/Other 4.8% of Direct $22,493.20 $14,995.47 $25,446.34 $16,964.23 $27,990.98 $18,660.65 $30,790.08 $20,526.72

Total Indirect Expenses $167,058.70 $147,248.47 $165,848.22 $145,359.23 $182,433.04 $159,895.15 $196,392.61 $159,895.15

$635,667.10 $459,654.07 $670,735.98 $481,951.07 $732,638.18 $526,698.58 $782,039.54 $550,326.44

Income (loss) ($322,083.38) ($251,785.46) ($334,753.42) ($237,338.28) ($353,116.08) ($237,992.76) ($369,606.98) ($224,318.30)

Profit element $23,430.42 $15,620.28 $25,244.39 $16,829.59 $27,510.26 $18,340.17 $29,282.35 $19,521.56Subsidy requirement $345,513.80 $267,405.74 $359,997.81 $254,167.87 $380,626.34 $256,332.93 $398,889.33 $243,839.86Subsidy per passenger $82.27 $99.04 $80.00 $79.43 $77.68 $67.46 $76.71 $59.47Subsidy per departure $260.57 $201.66 $271.49 $191.68 $287.05 $193.31 $300.82 $183.89

per passenger

Total Revenue

Total Operating Expenses

Kalaupapa
Kalaupapa to

Ho'olehua

Ala Carte Option

Weekly Frequencies 12

Completion Factor 99%

Annual Departures 612

Block Time (in minutes) 0.25

Annual Block Hours 153

Stage length (statute miles) 9

Available Seat Miles (9 seats) 49572

Load Factor 25%

Passengers 1400

Revenue Passenger Miles 12600

Average Fare $36.28

$39 fare

Revenue:

Passenger $50,790.70

Ancillaries $3.50 $4,900.00

$55,690.70

Direct Expenses:

Ownership $65.00 Per Blk Hr $9,945.00

Flight Crew $75.00 Per Blk Hr $11,475.00

per passenger

Total Revenue

Kalaupapa

Fuel & Into Plane Fees $209.00 Per Blk Hr $31,977.00

Insurance $15.00 Per Blk Hr $2,295.00

Maintenance $210.00 Per Blk Hr $32,130.00

Miscellaneous/Reaccom $15.00 Per Blk Hr $2,295.00

Total Direct Expenses $90,117.00

Indirect Expenses:

Landing Fees $18.00 per dept $11,016.00

Passenger Services $49,307.50

Marketing $3.35 per Pax $4,690.00

Set up costs / training

General & Admin/Other 4.8% of Direct $4,325.62

Total Indirect Expenses $69,339.12

$159,456.12

Income (loss) ($103,765.42)

Profit element $4,505.85

Subsidy requirement $108,271.27

Subsidy per passenger $77.34

Subsidy per departure $176.91

Total Operating Expenses